New Brunswick

Budget forecasts in question after COVID-19 evolution

Finance Minister Ernie Steeves says New Brunswick's financial outlook may not be as good as his budget predicted because of the quickly evolving COVID-19 pandemic.

The budget and COVID-19 were the top issues on this week's New Brunswick Political Panel

Finance Minister Ernie Steeves said the province hoped for 'real growth, but COVID-19 has put that in doubt. (Mike Heenan/CBC News file photo)

Listen to the full CBC New Brunswick Political Panel podcast by downloading it from the CBC Podcast page or subscribing to the podcast in iTunes.

Finance Minister Ernie Steeves says New Brunswick's financial outlook may not be as good as his budget predicted because of the quickly evolving COVID-19 pandemic.

Steeves said the province will have to study the numbers and game scenarios to see how the virus may impact the province's pocketbook.

On this week's Political Panel guests discussed the budget and the effects of COVID-19 on provincial finances.

"We had hoped for some real growth," said Steeves.

"But now with the COVID-19 situation, I don't know if that is going to happen."

Steeves said it was hard to predict what kind of impact the virus would have on New Brunswick finances, and that it's changing by the minute.

But Liberal MLA and finance critic Roger Melanson said the province has known for months that COVID-19 existed and that it would eventually make its way to the province.

"Certainly to goodness the finance ministers should have included more, either in its speech of the budget or even the budget, any contingency," said Melanson.

"It's surprising that, all due respect, the finance minister can't really give more insight of how he's foreseeing any potential impact."

Steeves said the province has contingency funds it can dip into in cases of emergency, like those for storms and floods.

Melanson said this money may be needed because of spring flooding.

Shared success?

The government and opposition can't seem to agree on how much credit the federal Liberals should get for the surplus announced in the budget tabled earlier this week.

Steeves said that while transfer payments from the feds are not insignificant, they are not the whole story when it comes to the budget or the surplus.

"It's a big cheque, but I mean it's still a $10 billion budget," he said.

"It's two per cent of that, right. So, yeah, it would be harder. Absolutely. Would it be impossible? I don't know, I haven't looked at that scenario really yet."

Melanson believes the feds deserve "a lot" of the credit for the surplus.

"Let's be honest, if you wouldn't see those incremental transfer payments and the, like it or not, the increase of the HST [in] the revenue column, it would be challenging for sure," said Melanson.

Green Party Leader David Coon said the transfer payments are a major factor in the province's budget.

"The parliamentary budget officer in his recent report looking at the financial fiscal sustainability in each province found there is no fiscal room in New Brunswick to either cut taxes or increase spending in their opinion," said Coon. 

"Without that increase in federal transfer we would have been looking at a very different budget." 


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